Stephen Donnelly (Wicklow, Independent) | Oireachtas source

This is welcome legislation. It is serious stuff and there is a good deal of technicality to it. I believe the Dáil and the Joint Committee on Finance, Public Expenditure and Reform could have added considerable value. I simply cannot understand why such important legislation, which is relevant to so many sectors of society represented by Members of the Dáil and Seanad Éireann, is getting only three hours in Parliament. I cannot get my head around it and I do not understand it. I believe that more scrutiny would have helped.

This is not the first time the Government has tried to introduce credit. We have seen the micro-enterprise loan fund scheme, the seed and venture capital scheme, the development capital scheme and innovation fund Ireland. It is fair to say none of these schemes is working. Let us consider the micro-enterprise loan scheme. As of late last year only 224 start-up companies had applied and only 79 grants or loans had been approved. The micro-enterprise loan fund is applicable to businesses which have already been turned down by the banks. It is a dubious situation for a company because the bank has already decided the company is not worth investing in and then Government money may be put up to invest in it. That money is not really being lent. The credit guarantee scheme had a budget of €450 million. It is a sizeable policy instrument. It has been up-and-running since October 2012. It underwrote 75% of the risk of private banks investing in SMEs using public money. It was expected at the time that it would distribute or facilitate approximately €150 million per year. However, in the first ten months we know it lent less than €10 million. A certain amount of money is being lent but it is fair to say that the figure is far less than it should have been. What if this Bill, which has major potential, had been brought before the Joint Committee on Finance, Public Expenditure and Reform for several days? The finance committee is working well at the moment. Had the committee been given the opportunity to bring in people from the SME and banking sectors to ask whether it would solve the problem, would it have helped? The Government has tried to solve the problem in numerous ways with numerous funds and various mechanisms but none of them appears to have worked. It is a shame not to have had proper constructive parliamentary input to the process to ensure that whatever was not working in all those other funds is address such that this time it does work.

One of the reasons the previous schemes have not worked is the lack of demand-side legislation or policy being introduced. There are ambitious supply side policies being introduced and this is one such element. We know that many SMEs are overindebted. Professor Morgan Kelly recently carried out some analysis and spoke to the matter. He indicated that the upcoming European Central Bank tests will probably uncover it. There are two areas at issue. The first is SME debt. For example, the classic case would involve an SME in a given town which invested in an apartment in 2005 when it should not have and, as a result, it is overindebted. No matter how much money is offered to that company, it will not invest any more. Then, there is the personal indebtedness issue.

According to a great factoid, the average age of a founder of a successful high-tech company in Silicon Valley is 39 years. That is my age, not 22 or 25 years. In Ireland, many of the people in or around that age are in the negative equity generation. They do not have money. I know many people who, in a normal economy, would be setting up the fantastic, high-tech and innovative enterprises that we want and need, but all they are doing now is trying to pay down negative equity.

Not enough has been done, but the good news is we know how to fix this. I hope the Minister has read the finance committee's report on the mortgage crisis. In fairness to the committee and its Chairman, Deputy Ciarán Lynch, that good, cross-party report goes quite far. If its recommendations were implemented, personal indebtedness could be tackled. Many of the people whom this Bill aims to facilitate to borrow and invest would be free from personal indebtedness or, rather, their personal indebtedness would be more sustainable. They would be financially and psychological more likely to invest the kind of money that the Bill has in mind.

Although it does not relate to Deputy Michael Noonan's Ministry, I introduced an examinership Bill that was voted down. Since its introduction, PricewaterhouseCoopers has stated that we need a non-judicial examinership process. Such a process would be useful and, with a new Cabinet in place, it might be encouraged. Between the examinership Bill and the finance committee's report on the mortgage crisis and, therefore, personal indebtedness, much of the demand-side challenges to this supply-side solution would be addressed.

I will support this Bill. We should have had more time to debate it, as much more could have been done with it. Please, Minister, consider the demand-side challenges. There are solutions. Between this supply side solution and tackling the demand side solutions, we could achieve something interesting.

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